A Bit of Optimism in the Alps,
A Lot of Pain in the Everyday World

One
thing can be said for certain: 99.9 percent of those who gathered recently week
for an Alpine sleepover either have a job or don’t need one. The same cannot be
said of the billions who were not there.

While
some of the world’s economic and political elite gathered in Davos, Switzerland for the annual World
Economic Forum, a United Nations agency reported that there has been an
increase in unemployment planet-wide of 28 million since the onset of the
current economic crisis five years ago. One million jobs were lost in western
capitalist economies last year alone and three million
in the rest of the world. And it’s getting worse. A total of 202 million people
could be unemployed across the globe sometime this year, the International Labour Organization (ILO) said January 29.

Dominic Rushe of the British newspaper Guardian described the findings in the annual ILO Global Employment
Trends thusly:

“… 6 percent of the world’s workforce were without a job in 2012. The number of jobless
people around the world rose by 4 million in 2012 to 197million. Young people
were the worst affected: nearly 13 percent of those under 24 were unemployed.
Some 35 percent of all young unemployed people have been out of work for six
months or longer in advanced economies, up from 28.5 percent in 2007.”

The
situation in some major European countries is particularly dire.

Take Spain for
instance. That country’s unemployment rate reached 26.02 percent in the fourth
quarter of 2012, leaving almost six million people out of work - 60 percent of
young people between 18 and 25 years old. The government says nearly 700,000
more people lost their jobs last year and there are now 1.8 million households
in which no one is working.

In the
27-member European Union as a whole, the jobless rate stands at 10.7 percent,
with 26 million people unable to find a job.

Since Davos, there has been running commentary assessing whether
attendees from 100 countries and up to 50 heads of state and corporate
executives attending the Forum came away optimistic or pessimistic about the
economic state of the world. “As more than 2,500 global movers and shakers
headed home Sunday, there was broad agreement that things are beginning to look
up on the economic front - at least in China, Africa, and emerging markets, but
not in Japan, Europe, and the United States,” observed the Associated Press.

“The
balance between optimism and pessimism is also always affected by personal
circumstances, as much as rational analysis,” wrote Gideon Rachman
in the Financial Times January 22. “So
the mood f Davos man will be lifted by the fact that
the last year has seen a bull run for stocks. This month the S&P 500 hit a
five-year high, and the FTSE All-World index is at its highest level for 18
months. Even the bankers are liable to arrive in Davos
with some of their old swagger restored. After all, there have been no major
scandals, collapses or arrests for months.”

In other
words, how you see the economic situation depends a lot on whether you are a
CEO, banker or well-paid government official on one hand or a jobless worker or
someone who could easily become unable to earn a living on the other.

And that’s
as true in the U.S.
as anywhere else in the world.

AP said there was “broad agreement”
at Davos “that things are beginning to look up on the
economic front - at least in China,
Africa, and emerging markets, but not in Japan,
Europe, and the United
States.”

Although
economy the U.S.
economy added 157,000 new jobs last month, the unemployment rate rose from 7.8
in December to a staggering 7.9 percent in January. That number is less than
the 196,000 jobs added in December. Over the month, the ranks of the unemployed
rose from 12.2 million in December to 12.3 million in January. African American
joblessness slipped from 14 percent to 13.8 percent over the month and the rate
for Latinos rose from 9.6 percent to 9.7 percent. About to 20 million people
are said to be unemployed or underemployed in the country at the moment.

While
the Associated Press headlined, “Stocks
rise on strong jobs numbers,” the New
York Times observed that “hiring growth has been uninspiring in the last
year, trudging along just barely fast enough to keep up with population growth
but not nearly quickly enough to put a major dent in unemployment. A backlog of
12.3 million idle workers remains. The average worker who is unemployed has
been pounding the pavement for 35 weeks” and “Millions have exhausted their
unemployment benefits, and many more will roll off the government’s system in
the coming months with no options in sight.”

While
those in charge of this clearly can’t agree on what should be done about the
situation on the jobs front, those gathered at Davos
appear to have taken note of the fact that, at least in Europe and the U.S.,
government policies are pushing things in the wrong direction and if some
powerful forces have their way, austerity measures will be rolled out that will
make things a whole lot worse.

“Three
years ago, a terrible thing happened to economic policy, both here and in Europe,” economist Paul Krugman
wrote in the Times last week. “Although
the worst of the financial crisis was over, economies on both sides of the Atlantic remained deeply depressed, with very high
unemployment. Yet the Western world’s policy elite somehow decided en masse
that unemployment was no longer a crucial concern, and that reducing budget
deficits should be the overriding priority.” That view is shared by economist
Robert Reich who observes that “The unfortunate reality is that on both sides
of the ocean we have people making economic policy who are largely sputtering
nonsense about how to remedy the economy. And for the foreseeable future they
will have the political power to keep their jobs no matter how disastrous the
outcomes of their policy might be.”

As
strange as it may seem, the problem of so many people out of work for long
periods of time has yet to find a credible place on the nation’s policy agenda.
It hardly rates a mention in the policy priorities emanating these days from
either Congress or the executive branch.

Reich
says the U.S. government is “following
Europe’s sorry example of failed austerity
economics.”

“At a
point where the US could be experiencing catch-up growth to make up for the
output lost since 2007, Washington is importing European austerity,” wrote Edward
Luce, Washington bureau chief of the Financial
Times, adding that “There is nothing about the anemic US recovery that
merits austerity at this point.”

On
January 31, President Obama killed off his high level President’s Council on
Jobs and Competitiveness that he formed two years ago in what was said to be an
effort to enlist outside expertise on dealing with joblessness. While the
announcement was awaited over whether the 26-member panel’s mandate would be
renewed, Erika Eichelberger wrote in Mother Jones magazine that it had “failed
to accomplish much over its two-year life span, and a lot of what it did turn
out was more friendly to business than to regular people.” A spokesperson for
the Council’s chair General Electric CEO Jeffrey Immelt
told her the panel, which included the chiefs of the heads of AOL, Intel,
Xerox, Boeing, Comcast, and Intel, and other corporate giants had come up with
60 recommendations for executive action and that “significant progress” has
been made on 54 of those. However, AFL-CIO president Richard Trumka, one of the two labor leaders on the Council, told Eichelberger: “By reducing overall revenues these reforms
could easily have the opposite [of the intended] effect… starving the
government of the revenue it needs to create good jobs and upgrade our
infrastructure and education systems, thereby making the United States a less
attractive place to invest.”

Last
January, the Council issued a report which Trumka
voted against saying, “It is clear from our work in all of these areas that
without timely action by government on a large scale, solutions will continue
to elude us as a nation. Unfortunately, I believe the report downplays the need
for a proactive role for the U.S.
government in many of these areas; fails to address the significant additional
revenues needed to address the challenges identified on an appropriate scale;
and in many cases erroneously identifies the root causes of the underlying
structural problems.”

The
President last met with the Council in February 2012.

On March
2011, in his last column for the New York
Times, Bob Herbert took note of the corporate influence on the new jobs
panel and commented, “Overwhelming imbalances in wealth and income inevitably
result in enormous imbalances of political power. So the corporations and the
very wealthy continue to do well. The employment crisis never gets addressed.
The wars never end. And nation-building never gets a foothold here at home.”

Some
observers had expected the job creation panel, which hadn’t met for a year,
would nonetheless be reauthorized if only because not doing so would be a bad
idea from a public relations standpoint. As it turned out, the Council’s demise
went relatively unnoticed.

According
to the Washington Post, “Officials
said the president always intended for the council to fulfill its mission and
then wind down, and said Obama would continue to actively engage and seek input
from business leaders about ways to accelerate job-creation and economic
growth. Among the steps Obama plans to pursue are expedited permits for
infrastructure projects, plus programs to boost entrepreneurship and workforce
development.”

Simply
put: that’s not enough.

Behind
the statistics and projections being circulated and discussed are real people,
men and women who lives and welfare remain precarious. They are paying heavily
for the economic policies being hashed in the capitals of the capitalist world
and will continue to do so as long as economic health is measured in terms of
products and profits. The aim of social policy should be to ensure that
everyone who seeks employment should have access to a means to earn a living
wage. That means creating jobs. That means now, not somewhere down the line
after “the market” has done it dubious magic. It’s been done before and it can
be dome again. But it takes political will.

Guy Ryder, director
general of the ILO and a former general secretary of the International Trade
Union Confederation, recently called the unemployment crisis “a massive waste
of the lives of young people and their talents and extraordinarily damaging to
the people themselves and their societies” and a threat to social stability.